There are many many many flaws with the correlative analysis of this paper, and the flaw you have identified is an absolutely key flaw.

Here's a great Odd Lots podcast on that specific issue: https://www.bloomberg.com/news/audio/2025-03-13/odd-lots-is-...

It's also interesting to note that the guest identifies lack of supply as the other key thing to fix, but finds that the idea that YIMBY policies could actually be put in place too politically infeasible to consider.